I think all BMWs are expensive in China, because they have to relate to each other price-wise. I believe they just produce locally when there is a sounds business case for it and keep most of the tax benefits to themselves. This is because you cannot suddenly have a 3-series which is less expensive than a 1-series, even the 3-series is locally produced and the 1-series is imported. On the other hand, the imported coupe version of the 3-series is actually significantly more expensive than the locally produced sedan. I do not think this is usually the case outside China? But I think this is the reason why the coupe is so extremely rare in China compared to the sedan.
For SUVs I believe only the X1 is locally produced. But I did not go the factories to check and make sure... Also I do not have any first hand experience with the locally produced models. One of my friends has two BMWs and one of them is locally produced, but it is the previous-gen 5-series, and things may have changed.
I believe it used to be so that the Chinese locally produced models featured the previous generation engine specs. So a 30i would have 231hp instead of 258hp. But this does not seem to be the case any longer.
Anyway, most of the local people have no way of knowing about the quality difference, and I would not listen too much to any anecdotes from non-professionals. Anyway, if you find any hard data on this I am interested in knowing more as well.
Little known facts about BMW: 1) The N54 is still in production and used in the current Z4 35i and 35is. 2) In a Z4 you can get sport+ steering combined with normal suspension etc by selecting DSC=off. (Update: DSC=off also offers sports steering in the M135i) 3) All Z4s with 19" wheels are still only offered with the worst performing OEM tires ever sold with a DCT equipped BMW (Potenza RE 050 RFT).